17.30 (CLOSE): Reports of an impasse between US politician over how to tackle the fiscal cliff saw a stand-off by traders on the world markets today.

The FTSE 100 Index eased back from the 6000 barrier, with progress on hold as comments from President Barack Obama and Speaker John Boehner cooled recent expectations that a deal was on the cards.

In London, the FTSE 100 Index was down 3.2 points at 5958.3, and the Dow Jones Industrial Average opened slightly lower after it appeared the Republicans were making their own plans to avoid steep automatic tax hikes and spending cuts.

In the currency markets the pound was up against the US dollar at 1.62, amid fears US politicians will miss their fiscal cliff deadline in 11 days, and it was also up against the euro at 1.23.

Market analyst at Alpari Craig Erlam said: 'A deal will still probably be done, but those hoping that it will be done before deadline day may be disappointed.'

The mood on the markets was not helped by disappointing retail sales figures for November, with the Office for National Statistics (ONS) reporting flat volumes, rather than the 0.4 per cent increase pencilled in by analysts.

In the supermarket sector, Tesco was 1.65p lower at 338.6p and Sainsbury's dropped 0.3p to 352.9p as the ONS noted a 0.1 per cent drop in food sales.

In thin pre-Christmas trading, P&O Cruises owner Carnival was the worst performing stock in the top flight, with a decline of 154p to 2391p after it reported bookings were behind the previous year, following the Costa Concordia cruise liner tragedy in January.

Cillit Bang owner Reckitt Benckiser was also a top flight fallers, losing 1.4 per cent or 56p to 3909p.

Elsewhere, shares in Johnnie Walker and Guinness owner Diageo crept 10p higher to 1848.5p after broker JPMorgan Cazenove raised its price target on the stock and said it no longer expected the company to underperform the European drinks sector.

Conditions in the United States were also improving, it added.

Oil and gas engineering firm Weir was near the top of the risers board jumping 3 per cent after broker Investec praised the company's $240million (£148 million) acquisition of pressure control provider Mathena.

Shares were up 51p to 1863p and were joined on the way up by temporary power specialist Aggreko, which added 42p to 1742p as it recovers from this week's profits warning.

Gaming firm 888 Holdings was down 1 per cent, despite a brief statement confirming it was on track to meet expectations for the full year. Amid disappointment that there was no upgrade to forecasts, shares slipped 1.7p to 117.2p.

The biggest FTSE 100 risers were ITV up 3.2p to 107p, Intercontinental Hotels ahead 51p to 1710p, Weir 51p higher at 1863p and Aggreko up 42p to 1742p.

The biggest FTSE 100 fallers were Carnival down 154p to 2391p, Evraz off 11.4p to 267p, Randgold 140p lower at 5965p and United Utilities down 14p to 674p.

16.00: The Footsie has lost a point from yesterday's nine-month closing high, standing now at 5,960.2.

Continuing worries over whether a solution will be found to the US fiscal cliff of tax hikes and spending cuts has halted the market's charge towards the 6,000 mark.

The Dow Jones has opened slightly higher though, up 2.6 points at 13,249.

ETX Capital market strategist Ishaq Siddiqi said: 'It now looks less likely that we will have a deal to avert the crisis just before the deadline at the end of this month.

Trading on the FTSE 100: The blue chip index closed up 25.69 points yesterday at 5,961.59

'As such, investors are taking no
chances before the last full trading week of the year ends and booking
some profits on relatively overbought European indices.'

The mood was not helped bydisappointing retail sales figures for November, with the Office for
National Statistics (ONS) reporting flat volumes rather than the 0.4 per
cent increase pencilled in by analysts.

In the supermarket sector, Tesco was
1.65p lower at 338.6p and Sainsbury's dropped 1.2p to 352p as the ONS
noted a 0.1 per cent drop in food sales.

Conditions in the United States were
also improving. Oil and gas engineering firm Weir set the pace in the
top flight with a rise of 3 per cent after broker Investec praised the
company's $240million (£148million) acquisition of pressure control
provider Mathena.

Shares were up 55p to 1868p and were
joined on the way up by temporary power specialist Aggreko, which added
39p to 1739p as it recovers from this week's profits warning.

Gaming firm 888 Holdings was down 1
per cent, despite a brief statement confirming it was on track to meet
expectations for the full year. Amid disappointment that there was no
upgrade to forecasts, shares slipped 1.6p to 117.3p.

11.40:

The Footsie continues to tread water, up 5 points at 5,966.8.

Will Hedden, sales trader at IG,
said: 'The formerly-unstoppable FTSE 100 has hunkered down at 5,960, in
sight of the magic 6,000 figure but not as close as we might have hoped
earlier in the week.

'The
culprit holding her back is Vodafone, having performed particularly
poorly this week. Today the telecoms company has nudged a touch lower,
following the announcement it’s in the running for 4G contracts from
January 2013.

'Having
been one of a group of telco’s that paid over the odds for rights in the
Netherlands earlier this week, analysts are scared that the same is
likely in Britain and other European markets.'

09.30:

The Footsie is hovering around yesterday's close price; currently it's recovered to stand a point up at 5,963.

It still has the 6,000 barrier in its
sights but comments from President Barack Obama and Speaker John
Boehner cooled expectations that a US deal to avert the impending fiscal
cliff is on the cards.

The
Dow Jones was 0.7 per cent lower last night and Asian markets also
struggled to make progress amid the latest round of comments.

In thin pre-Christmas trading, Cillit
Bang owner Reckitt Benckiser was the biggest top flight faller with a
decline of 1 per cent or 45p to 3920p. Barclays gave up some of
yesterday's gains to stand 2.5p lower at 264p.

Elsewhere, shares in Johnnie Walker
and Guinness owner Diageo crept 1.5p higher to 1840p after broker
JPMorgan Cazenove raised its price target on the stock and said it no
longer expected the company to underperform the European drinks sector.

Conditions in the United States were also improving, it added.

Gaming firm 888 Holdings was down 2
per cent, despite a brief statement confirming it was on track to meet
expectations for the full year. Amid disappointment that there was no
upgrade to forecasts, shares slipped 2.5p to 116.5p.

08.20:

The Footsie has edged down 4 points to 5,957.5.

08.00:

The FTSE 100 index is seen opening down 15-17 points, or 0.3 per cent lower, according to financial bookmakers.